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Tax Avoidance in Singapore – A Critical Analysis

Lau Kah Hee

(2010) 22 SAcLJ 273

Abstract:
This article posits that the reach of s 33 of the Income Tax Act as an anti-avoidance provision is far too wide, thus attenuating its intended efficacy in only policing and counteracting illegal tax-avoidance schemes (and not legal tax-mitigation arrangements). In the light of s 33 of the Income Tax Act being modelled after both s 260 of the Australian Income Tax Assessment Act and s 99 of the New Zealand Income Tax Act 1976, three principles – namely, the predication principle, the tax-mitigation principle and the choice principle – that were developed and progressively refined by the courts in Australia and New Zealand, will be examined. The article comes to the conclusion that the three principles are of limited utility in defining the scope of s 33 clearly. The separate task of conducting a comprehensive exploration of the possible solutions to the problems as regards s 33 is, however, beyond the scope of this article and should instead be undertaken on another occasion, preferably with the aid of guidance from the local courts.